USD/CHF challenges the parity level

Matías Salord FXStreet

A decline of the US dollar across the board pushed USD/CHF to the downside on Tuesday. The pair broke an important support at 1.1050 and fell to test the parity level. So far it has been able to hold on top but it remains under pressure.

Test continues

During the European session USD/CHF traded momentarily below 1.0000. It bottomed at 0.9996, the lowest since November 16 and then it rebounded modestly. The recovery from the lows found resistance at 1.0035. It was about to end the day hovering around 1.0030, below the relevant 1.0050 (previous support) and the lowest in two months.

The parity area continues to be challenged. A decline below could push the pair toward the next strong support area located at 0.9960 (May and July highs).

Greenback needs to climb back above 1.0050 in order to reduce the short-term bearish pressure. On a wider perspective, the downside bias could remain in place as long as the price hold below 1.0190, where the 20-day moving average stands.

Events ahead

On Wednesday, economics reports from the US will be release. They include CPI, industrial production, and the Beige Book. The numbers could influence on the US dollar. The key event of the week for the is likely to be the European Central Bank on Thursday. Usually, the decisions and the press conference from Mario Draghi tends to move the Swiss franc across the board. Also, Trump’s inaugural speech on Friday could impact the markets.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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